In a very real sense, every product manager is in the risk management business. Every investment decision we make represents a risk.

Should we go for a big project that can potentially redefine our position, or maybe a handful of medium-sized efforts, or continue plowing through the laundry list of bug fixes and incremental features that our customers are always pushing for?

I see way too many product managers out there pursuing what they consider the low-risk path of just adding features and fixes. Many product managers think the “safe” bet is to continue along the current path protecting what they have. But many of us have learned the hard way that in this business, playing it safe is usually one of the least safe things you can do. Few products can continue to thrive when all they do is play defense, trying to protect their position rather than move forward with innovations.

Innovation is something we have to constantly pursue. And innovation involves taking risks.

Product managers have to get comfortable with risk. You simply can’t innovate the way you need to if you don’t.

But that doesn’t mean you shouldn’t do everything you can to mitigate that risk.

There are several techniques and practices which are designed to effectively reduce the risk of being wrong, yet still give yourself the chance to find out if you might be right. Here are five of my favorite techniques for managing risk:

1. Understand the objectives. Make sure you have a very clear understanding of what problem you want to solve, who you want to solve it for, and how you’ll know if you succeed. Do an opportunity assessment.

2. Prototype your ideas. The process of creating a prototype will force you to think through the idea at a much deeper level, and will uncover many of the lurking issues, as well as expose ways to make the idea better.

3. Test your prototype on target users. Most important of all, take your prototype out of the office and put it in front of real target users to see what they think. But if things don’t go great right away, don’t give up quite yet. It is normal to require a few iterations of the prototype before users see the virtue of the idea (and can figure out how to use the product well enough to actually see the benefits).

4. Assess the feasibility before starting to build. Use your lead engineers during discovery to understand the complexities and costs before deciding to spend the time and money to build the product.

5. Deploy gently. Once you’ve built the product and are ready to roll it out, be sensitive to your users and customers, especially if this is a significantly new approach to an existing product. Remember that different users adapt to change at different rates, and they need to be able to try out and learn the new product at their own pace.

A few other notes on risk:

– Sleep on it. Give yourself a chance to think about new ideas before giving in to the temptation to immediately say no. Many people think the easiest way to be right 80% of the time is to say no to every new idea they hear. Unfortunately, they’ll also never enjoy the success of a winning idea.

– Pick your battles. Many products take risks in areas that really don’t provide any rewards. These are gratuitous risks. Save your risks for areas that matter.

– Consider a spin-off. If you’re in a big, conservative, risk-averse company, it may make sense to spin-off the group to pursue the idea. You can always bring the group back in if things go really well, but if they don’t you don’t risk the brand or the company’s assets.

– Encourage a risk-taking culture. There is much you can do to promote risk taking. Note also that some national cultures are much more comfortable with risk than others. If you live in a risk-averse country, you’ll need to work especially hard to find product leaders and management that are comfortable with risk.

– Have faith. After all is said and done, even if you’ve done everything you can to mitigate the risk, sometimes you just need to have a little faith in your ideas and give the product a chance in the marketplace.

If your team hasn’t pursued anything significant in the past couple years, I hope you’ll take a fresh look at what you could do to take your product to the next level. Acknowledge the risk, but then follow the techniques above to mitigate those risks, and hopefully get you and your management to the point that you feel comfortable enough to move forward and take the idea to market.

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